Comments

Market Update

US tsys higher, 10Y 2.35% (-1bp) ahead of thin calendar with JOLTs job opening data and FOMC minutes from Sep meeting at 2:00PM.   The US tsy auctions $24bln in 3Y and $20bln in 10Y notes as well with the latter ~17bps higher in yield than at the last 10Y auction on Sep 12th. Core Euro bonds lower, 10Y bund/tsy spd 3bps tighter as geopolitical risks from Catalonia subside, rally in EU peripherals. GOCs unch, 10Y 2.12%,  volatility has collapsed over the last month with the 10Y benchmark in a ~$0.30 corridor. Provincials unch , 10Y supply rumoured.

News headlines 

Madrid Keeps Pressure on as Catalans Blink on Independence (Bloomberg) Spain maintained its hard line against Catalonia’s secession campaign after the regional leader in Barcelona stopped short of the declaration of independence his allies wanted.

Trump Says He’ll Adjust His Tax Plan in the Next Few Weeks (Bloomberg) President Donald Trump said Tuesday he plans to make changes to his tax plan within the next few weeks, while dismissing concerns that his public spat with Senator Bob Corker would scuttle an overhaul.

Japan Shares Rise With Nikkei 225 Closing at Highest Since 1996 (Bloomberg) Japanese shares advanced, with the Nikkei 225 Stock Average closing at its highest since December 1996, bolstered by companies in industries ranging from technology to retail.

Sears Canada going out of business, laying off 12,000 (Toronto Star) Once a titan of Canadian retail, Sears Canada announced Tuesday that it is going out of business, putting 12,000 people out of work and shuttering all operations nationwide.

Canada Housing Starts Posted Rare Drop in September (The Wall Street Journal) Canadian housing starts fell in September after eight straight monthly gains, although the level remains elevated and suggest residential construction lifted economic growth in the third quarter.

Canada’s indebted households vulnerable to shock: BOC’s Wilkins (Reuters) Canada’s household sector is vulnerable to any kind of negative shock due to its high level of indebtedness, but stress tests show Canada’s banking system should weather a drop in house prices, Bank of Canada Senior Deputy Governor Carolyn Wilkins said on Tuesday.

Overnight markets 

Overview: US 10yr note futures are down -0.037% at 125-07, S&P 500 futures are down -0.13% at 2545.25, Crude oil futures are up 0.1% at $50.97, Gold futures are down -0.08% at $1292.8, DXY is down -0.13% at 93.17, CAD/USD is down -0.04% at 0.7993

US Economic Data

Canadian Economic Data

There is no Canadian Economic Data for today.

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys slightly higher, 10Y 2.345 (-1.5bps) on avg volume in TY futures (270k).  a large5Y  tsy/German block trade helped underpin tsys in Europe. Gilts lower, underperforming bunds on weak 20Y gilt reopening and better than exp Sep industrial production. Tsy supply a factor this week with $66bln in 3,10 & 30Y auctions. Data calendar highlighted by Sep PPI, CPI later this week with the latter expected to reflect the post hurricane surge in gas prices.  In Canada, GOCs higher in line with tsys, little reaction to stronger than exp Sep Housing Starts.

News headlines 

Catalans Face a Day of Reckoning Over Independence (Bloomberg) The Catalan government’s determination to break from Spain faces its moment of truth, as the regional parliament meets to consider a declaration of independence that risks an ironclad backlash from Madrid, the threat of economic meltdown and international isolation.

Old Grudges Blow Up in the Turkey-U.S. Feud (Bloomberg) With its arrest warrants and visa freezes, the Turkey-U.S. standoff looks more like a flashpoint between enemies than a difference of views among friends.

Politics in Focus as Spanish Stocks, Dollar Drop: Markets Wrap (Bloomberg) Politics remained the dominant theme in the markets on Tuesday as Spanish stocks declined and the euro rose before a pivotal meeting of Catalan’s regional parliament. The dollar weakened on concerns over U.S. tax reform and sterling rose as U.K. Prime Minister Theresa May won support for her Brexit stance.

U.K. Shows ‘Mixed Picture’ as Output Rises, Trade Deficit Widens (Bloomberg) A picture of an economy struggling to gain momentum emerged in U.K. figures published Tuesday.

Oil Companies Wade Back Into Gulf of Mexico as Nate Fizzles (Bloomberg) Oil companies were heading back into the Gulf of Mexico and working to restore operations after Hurricane Nate fizzled out over the U.S. South on Sunday.

Canada gains jobs for 10th month in a row with boost in full-time work (Financial Post) surge in full-time work fuelled a 10th-straight month of net job gains to match the economy’s longest monthly streak since the financial crisis nine years ago.

U.S. Lost 33,000 Jobs in September; Unemployment Rate Dips to 4.2% (NY Times) Staggering from the impact of hurricanes that walloped Texas, Florida and neighboring states, the economy lost 33,000 jobs in September, the first monthly decline in employment in seven years, the government reported on Friday.

Overnight markets 

Overview: US 10yr note futures are up 0.05% at 125-05, S&P 500 futures are up 0.13% at 2547, Crude oil futures are up 1.29% at $50.22, Gold futures are up 0.72% at $1294.2, DXY is down -0.29% at 93.402, CAD/USD is down -0.36% at 0.7996. 

US Economic Data

Canadian Economic Data

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys  weaker before Sep payrolls release,10Y 2.365% (+1.6bps). Sep employment expected to have risen 80k after a 156k increase in August, the latest data distorted by hurricanes. Equities weaker (S&P fut -1.0), oil weaker. Tsys under pressure in Europe weighed by weaker bunds on stronger factory orders. GOCs lower, wider vs tsys before Sep jobs figures. Expectations are for a slowing in empl growth to 12k from 22k in Sep, wage growth likely to garner just as much attention given Poloz reference to capacity in his latest comments last week.   Provincial spreads steady this week, Ontario curve flatter as tens outperform.

News headlines 

Storms May Have Cut U.S. Hiring in Half Before Jobs Bounce Back (Bloomberg) While the U.S. job market’s solid run in 2017 was probably curbed last month by forces most economists couldn’t predict, any weakness is likely to be short-lived. The effects of two major hurricanes that inflicted potentially $90 billion in economic losses are expected to show up in September employment figures due Friday.

Tropical Storm Nate Blamed for 22 Deaths; Threatens US Coast (Bloomberg) Newly formed Tropical Storm Nate was blamed Thursday for at least 22 deaths in Central America as it dumped rain across the region on a path that would carry it toward a potential landfall on the U.S. Gulf Coast as a hurricane over the weekend.

Deadly Storm Nate Shuts Oil Rigs on Track Toward Gulf Coast (Bloomberg) Tropical Storm Nate, which has already shut oil and gas platforms in the Gulf of Mexico, strengthened as it continued north on a path that’ll bring it ashore in the U.S. by week’s end.

May Faces Calls to Quit After Speech That Went Wrong (Bloomberg) U.K. Prime Minister Theresa May is losing the confidence of her colleagues and should consider stepping down, a former minister suggested, after a key speech aimed at revitalizing her leadership descended into chaos.

Fed’s Williams Sees Need for Rate Hikes While Harker Eyes December (Bloomberg) Federal Reserve Bank of San Francisco President John Williams said moderate growth and his outlook for higher inflation will allow the U.S. central bank to raise interest rates, while his counterpart in Philadelphia signaled he’s anticipating a hike in December.

As Trump turns his back on climate change, Canada’s clean-technology sector stands to gain (Toronto Star) Donald Trump makes no secret of the fact that he’s anything but an environmentalist. Where his regressive policies will lead is the subject of constant debate, but it stands to reason that they may cloud the future for Canada’s clean-technology sector.

Overnight markets 

US 10yr note futures are down -0.087% at 125-02, S&P 500 futures are down -0.09% at 2547.75, Crude oil futures are down -1.46% at $50.05, Gold futures are down -0.19% at $1270.8, DXY is up 0.04% at 93.996, CAD/USD is up 0.06% at 0.7953. 

 US Economic Data

Canadian Economic Data

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Hugues Savard

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230